Exchange companies express difficulty in complying with Kuwaitization

Central Bank of Kuwait has clarified that it has no role in monitoring compliance with the Kuwaitization plan, or in imposing it on money- exchange companies in the country. The explanation came after the bank had earlier sent a circular to all the exchange houses that they needed to comply with the government’s Kuwaitization plan, which calls for reserving up to 15 percent of jobs in exchange firms for Kuwaiti nationals by 20 July.

In a recent meeting with representatives of the Federation of Exchange Companies in Kuwait, the Central Bank explained that its role was limited to only sending the circular to all the exchange houses in the country. The bank added that the directive on Kuwaitization had come from the Public Authority of Manpower (PAM) and that exchange companies need to raise any issues pertaining to the plan with PAM.

In the meeting with the Chairman of the Kuwaiti Federation of Exchange Companies, Abdullah Al Mulla, and his deputy Talal Bahman, Central Bank officials pointed out that PAM was the only entity assigned to impose and monitor compliance with the Kuwaitization plan. The authority was also responsible for taking any punitive measures against companies, including levying fines of up to KD300 per employee hired by companies in violation of the set manpower ratios.

On the possibility of allowing exchange companies to extend the deadline for the completion of the national employment rate by an additional six months so that they could modify their status or provide proof of plans to recruit more national manpower, the bank explained that it was also not interested in considering the application of the Federation, as that too was within the authority of PAM.

The Federation of Exchange Companies is now expected to approach PAM through an official letter explaining the challenges they face in meeting the specified employment ratios. The Federation will reportedly clarify to PAM that the low salaries and work shifts of exchange companies will not be attractive to Kuwaiti nationals. Moreover, increasing salaries or reducing work shifts to accommodate citizens is not be a viable option for exchange companies, as it could threaten their ability to continue operations and would also reflect poorly on Kuwait’s business and investment environment.